December 2018

12/21/2018

People spend decades saving, tracking their account, and hoping they have enough money for their retirement. However, there’s often a missing piece—sometimes more than one!

How is your retirement planning going? No, we aren’t asking about your retirement accounts, although those are important. This article, “The One Piece Missing From Most Retirement Plans,”from Forbes, notes that while most people obsess about their savings, the missing piece they should be considering is what their retirement plan is: what do they want to do during retirement.

You can’t possibly know how much money you’ll need for retirement, if you don't know what you’ll be doing, right? There’s a big difference in the money needed to travel around the world versus sitting on the porch knitting sweaters for grandchildren and playing bingo at church.

Next, when you wake up on your first morning of official retirement, you’ll have no responsibilities or plans. How great! But, be honest: how much can you really tend to your garden or catch up on reading? Retirement can be up to 30 years or more. That's a lot of time left to live. Retirees frequently are bored, lonely, or depressed during retirement, because they don't have the routine, social interaction or purpose that they had at work.

Before you begin your retirement calculations, ask yourself these questions:

Where will I live?

Do I want to downsize?

What are my dreams and goals in retirement?

Do I want to have the flexibility to move near my children?

Do I want to help my children with their finances?

Have I adequately considered the rising cost of healthcare?

Do I have family to help me?

Will I need to consider living in a retirement home?

Do I want to work a part-time job to keep busy?

Do I want to leave my estate to my children or charity?

Yes, you need to save for retirement, and you need to make sure you have an estate plan in place. However, don’t neglect the important task of figuring out how you want to spend your time when you are retired. That will have an impact on how much money you need, where you will live and what the last decades of your life will look like.

12/20/2018

Millions of Americans have access to healthcare services, because of one of these two programs. Their names are similar, but they serve different functions.

Maybe people get confused because the first six letters of both Medicare and Medicaid are identical. But they are very different, as the article “Medicare vs. Medicaid” from U.S. News & World Report explains.

Each program concentrates on different populations and offers specific benefits for its insured. There are several differences between Medicare and Medicaid. However, they share one thing: they are similarly complex. Let’s look at the key differences between Medicare and Medicaid and how each health insurance program works.

Medicare

Medicare beneficiaries are primarily seniors. Everyone who has paid into the Medicare system becomes eligible for Medicare when they reach age 65. Medicare isn’t based on income. Those who’ve received Social Security disability benefits for two years or who have certain conditions, like ALS (Lou Gehrig’s Disease), are also eligible. Medicare is operated by the federal government, and expenses are paid from Medicare trust funds. Original Medicare includes Part A, which pays for expenses related to hospitalizations, and Part B, which covers outpatient care. Beneficiaries can also buy a separate Part D plan for prescription drugs. There may be deductible and copayment costs associated with these plans.

Those who’d rather get benefits from a private insurer, instead of from the government, can sign up for Medicare Advantage, or Part C. These plans are required to cover everything provided by Medicare Parts A and B, and many also provide Part D coverage and dental or vision care benefits. Medicare Advantage plans vary in their deductibles and out-of-pocket costs and can restrict participants to the use of a network of approved providers.

Medicaid

Medicaid is the government health insurance program for those in low to moderate income households. People may also be eligible if they have physical, intellectual, or behavioral disabilities. The income and asset limits vary by state, but 138% of the federal poverty limit is the median eligibility requirement for adults. Applicants can usually have no more than $2,000 in liquid assets. Medicaid coverage includes hospitalizations, outpatient care and prescription drugs, as well as long-term care. Many enrollees have little or no out-of-pocket costs for coverage.

To be eligible for Medicaid, seniors must spend down most of their assets, as well as meet income requirements. Most states have a five-year look-back period that prevents seniors from transferring assets to another family member to meet Medicaid eligibility.

Medicare and Medicaid pay for many of the basic services, but there may be gaps in coverage, such as dental services or prescriptions. One can close the gap in dental care, by coupling their Medicare or Medicaid coverage with an affordable alternative to dental insurance, such as a dental savings plan, which can save members between 10 to 60% on procedures. For prescriptions, free discount services can reduce drug costs by half or more.

One of the areas of practice for an elder law attorney is helping clients protect their assets and their families, so that they can qualify for Medicaid benefits, especially in a situation where they need long-term care. An estate planning attorney can also guide you through this complex process.

12/19/2018

Who doesn’t love to learn about the inner lives of celebrities? We live vicariously through articles devoted to the rich and famous. However, when they die and leave a mess behind, we should pay attention to what they did wrong.

You don’t have a will. Your affairs should be properly handled, and your family should be protected, when you pass away. However, neither singers Aretha Franklin nor Amy Winehouse had a will. Franklin left behind four sons with some financial issues. Amy didn’t take the time to plan either. She didn’t say how she wanted her $6.7 million estate to be distributed. Without any written instructions, her estate went through probate and was distributed to her parents. The primary purposes of a will are to designate the guardians of minor children, an executor of your estate and which beneficiaries are to get what assets.

Not considering a trust. Who wants to be a celebrity when it comes to private matters? Remember that a will is a public document, and anyone can go to the courthouse and look it up. However, with a living trust, your wishes remain private. Learn from the saga of the late Whitney Houston, who died at age 48. First, her will named her daughter Bobbi Kristina Brown as sole beneficiary. However, then her daughter died three years later at age 22. Houston’s estate was then involved in a battle with the IRS over the valuation of recording royalties and was assessed a tax bill of $2.2 million. To top it all off, her ex-husband Bobby Brown, ironically may be the heir of the Houston estate.

A living trust can help your estate plan remain private and away from others. It names who is entitled to your assets and how they are to get them. A trust names trustees. It also may provide estate tax benefits. If you look at Whitney Houston’s situation, a living trust may have helped by providing guidance to daughter Bobbi, after her mother’s death.

Failing to update your estate plan. We all experience changes throughout our lives. This includes finances, health, family dynamics and relationships—any one of these can mean it’s time for an estate plan review with your attorney. Look at the late Michael Crichton, the author of Jurassic Park, who was diagnosed with throat cancer, when his sixth wife was pregnant. Crichton failed to update his estate plan to include his soon-to-arrive son. His wife sued to include the baby as an heir, and Crichton’s daughter from a prior marriage opposed. The judge ruled the baby could inherit. Crichton could have saved everyone a lot of stress, anguish and money, by simply updating his estate planning documents.

Failing to plan for disability before death. You should also think about planning for the possibility of being disabled and needing assistance in managing your affairs. Ask your estate planning attorney about powers of attorney and living wills to help protect you and your loved ones, in case of incapacity. For example, the final years of blues singer Etta James, known for “At Last” and “Tell Mama,” were full of court hearings. The legal battle was between her husband of 42 years and her son from a prior marriage. Etta signed power of attorney over to the son in 2008, but her husband claimed that she suffered from dementia and was incompetent. Her son wanted to restrict the amount of money Etta’s husband spent for her medical care. They settled, and the husband was named as conservator. However, he was limited to $350,000 for medical care for his wife. Etta James passed a short while later.

So you’re not famous and don’t have a room with gold records and Emmy statues? That doesn’t matter so much as you might think. Make your kids proud not because you are a global star, but because you took the time to meet with an estate planning attorney and protected your family. Now that’s cool.

12/18/2018

The real question isn’t if you need life insurance. The question is, what type of insurance do you need.

Life insurance is one of those things that you need, the minute you have a spouse or children who count on your income. Life insurance comes in two basic categories: term and permanent, also known as whole or universal insurance.

Term insurance is the less expensive of the two. It’s used to pay for things that your family needs in the next twenty or thirty years: paying the mortgage, financing college costs. Permanent insurance is used for leaving an inheritance, paying estate taxes or funeral costs. Permanent insurance grows in cash value that, depending on the terms of the policy, you can access while you are living.

NBC News recently published a story that asks “How much life insurance do I need?” As the article explains, term policies are cost effective and can be specifically designed to be in place when you need the coverage, like paying your mortgage or college tuition for children. Of course, the downside with term policies is that they’re only for a set duration. They’re not forever. People wait until the end of their term policy to get another one. Instead, they should buy a new policy as early as possible. Otherwise, you wind up paying more for the same amount of coverage later. Another negative about term policies, is that if you go to renew after the term, the premium will increase.

Permanent policies span your whole life and have cash value. They also grow tax free, and the savings can be borrowed from the policy tax free after a certain number of years. For higher-income earners, this can be a good way to have tax-free income in retirement and have greater tax diversification. Another benefit of permanent policies is that they can be used to pass down an inheritance tax-free. When someone dies, there may be an estate tax on their assets. Purchasing a permanent policy to alleviate this cost, is an effective way to pass down your wealth.

However, permanent life insurance policies are expensive. Returns in a life insurance policy are highly debated, with some believing in the tax advantages, and others counseling to “buy term and invest the rest.” Everyone’s situation is different. You can assess your needs by taking the “DIMEF” test:

Debts: Look at all of your debts, except your mortgage.

Income: Lost income from a spouse or a partner is the primary reason to buy life insurance and maintain the current lifestyle.

Mortgage: Life insurance can pay off a mortgage, so your family can remain in the same home.

Education: College costs for children or a spouse.

Funeral expenses: These expenses add up quickly and your life insurance proceeds can pay for them.

Experts say you should have at least five times your annual income and enough to pay for 100% of your debts. You can calculate it with the following approach:

Take the total of your liabilities and debts, income to be replaced, final expenses and education or extra goals;

Subtract the savings or assets your family would use immediately, if you passed away; and

Subtract any current life insurance you own, excluding coverage offered through your work.

The cost will differ, based on factors such as age, health, lifestyle, gender, type of insurance and amount of coverage. You may also need to take a physical exam. If you’re ill, the cost will be more, or you may not be eligible for life insurance. The older and less healthy you are, the shorter your life expectancy is—and the more expensive the policy. To get a solid quote, you’ll need to undergo underwriting. The insurance companies can pull medical records or order a full physical. If you take prescription medications, the likelihood of a paying a higher premium also increases.

Life insurance is something that people tend not to think about, until they have children or purchase a home. The younger you are when you purchase a policy, the less expensive it will be. That’s something today’s millennials need to start thinking about. More than half of all millennials don’t own a life insurance policy. That may catch up with them in the future.

12/17/2018

Nursing home residents are vulnerable. To protect a loved one who lives in a nursing home, you’ll need to know what the facilities are and are not permitted to do, and what actions to take, if necessary.

A nursing home is defined by Medicare as a special facility or part of a hospital that provides medically necessary professional services from a nurse, physical or occupational therapists, speech pathologists or audiologists. These rules are specific to a skilled nursing facilities, reports Investopedia in the article, “Things Nursing Homes Are Not Allowed to Do.” These rules do not apply to assisted living facilities or retirement homes, which have their own rules.

The following are some of the patient’s rights as spelled out by Medicare, and some are insights shared by a nursing home expert.

Discrimination. Skilled nursing facilities are prohibited by federal law from making a decision about whether someone can become a resident for reasons of race, color, religion, age, sex or any other protected characteristic.

Provided Services. The types of services to be provided and fees must be stated in writing before a patient becomes a resident. In some facilities, like continuing care communities, a large buy-in fee is required that ensures that residents will have access to various levels of care, as health needs change. Skilled nursing facilities may not charge those fees.

Patient Health Assessment. Patients receive a health assessment when they first enter a nursing home, and every day for as long as they are in the nursing home. The medical staff evaluates the physical and mental health, ability to speak and make decisions and to perform basic acts of daily living. The information from the assessment is used to plan treatment, evaluate progress and decide if the patient continues to be eligible for Medicare coverage. Residents have the right to be actively involved in their care planning. If they cannot, an adult child can participate for them.

Finances. While the nursing home is permitted to manage a resident’s personal finances, it cannot require a resident to do s, and it cannot do so without the written consent of the resident. If the resident decides to permit the nursing home to manage his money, they must receive quarterly financial statements, may not prevent residents from accessing their accounts, cash or financial documents and if more than $50 is deposited, the account must pay interest.

Respect and Dignity. It’s unfortunate that this has to be a law, but it does. Residents have the right to decide when they want to go to bed, when they want to wake, when they want to take their meals and what activities they want to do, as long as their decisions do not conflict with the plan of care. Abuse is not allowed, verbal or physical. No one is allowed to be medicated with any drugs not in their treatment plan. Physical restraint is not permitted, unless they pose a danger to themselves or others, and no one should be isolated. Residents also have the right to own personal property, privacy and security.

Visitation. Patients have the same rights in the nursing home that they have at their own homes. They may have visitors during reasonable times of day and they have the right not to see people, if they do not wish to see them. Family members must be permitted to visit at any time, unless the patient does not wish to see them.

General Health. The patient has the right to be treated like an adult, regardless of his or her physical or mental health. That means she is entitled to know her diagnoses, what medications she is being given and to see her medical records. She is also entitled to see her own doctor and not those of the nursing home. She may refuse treatments and medications, just as an outpatient may do. If she requests mental, legal or financial counseling, those services must be provided.

Medicare Benefits. Things get a little tricky here. The nursing home is not required to track the Medicare benefits being used to pay for the patient’s care. They also don’t have notify residents that the benefit days are ending. The only exception: if Original Medicare benefits stop earlier than expected because the patient is deemed not to be in need of the care. That’s the only time the nursing home is legally obligated to inform the patient. Patients or their family members need to be very cognizant of their coverage status. Medicare may cover a certain amount of time, under certain conditions, and then the benefits may end. Patients will be responsible for the rest of the bill.

Discharge Planning. Patients have the right to have help from the nursing home in the discharge planning process. Without the patient’s consent, they may not be discharged or transferred, unless:

the patient’s health has declined to the stage, where the facility can no longer meet his needs;

the patient has improved to the point, where he no longer requires the facility’s services; or

the patient poses a threat to his own welfare or that of other residents.

In addition, a resident can be discharged for not paying the facility’s bills (but not when the delinquency is caused by waiting for Medicaid payments from the government).

Complaints. Residents and their advocates have a right to complain about any issue they have in a nursing home, and nursing homes can’t punish someone for doing so.

Ability to Sue. A 2016 regulation gave nursing home residents and their families the ability to sue any nursing home that receives federal funding. Before this, nursing homes could try to force people into arbitration, and any quality of care and safety issues could be kept private. However, a preliminary injunction granted in Mississippi in late in 2016 put this regulation on hold for now.

New Rules. There are new rules that give nursing home residents more rights. Residents will be allowed to receive any visitor, not just relatives, at any hour of the day, provided visitors don’t disturb fellow residents. Residents who want to live together will be permitted to do so, and nursing homes will have greater responsibility for ensuring that residents’ personal belongings aren’t lost or taken. In addition, nursing homes will be required to provide meals and snacks when residents want them, rather than only at set times. Staff will get more training in caring for dementia patients and preventing elder abuse, and nursing homes won’t be able to easily discharge residents with dementia, by sending them to a hospital and then refusing to readmit them.

At the essence, the patient’s rights in a nursing home should be the same as the patient’s rights in their own home. The more family members can be involved in their loved one’s day to day life at the home, the better the quality of life will be for the patient.

12/14/2018

The official estate and gift tax limits for 2019 were announced by the IRS. The news for high-net worth families is good. The estate and gift tax exemption will be $11.4 million per individual and $22.8 million for married couples. There will be no changes to the annual gift exclusion amount of $15,000.

For the rest of us, these new limits should serve as a reminder that we all need estate plans, even if we don’t have an estate that comes close to these limits.

The Trump tax cuts severely reduced the number of estates that will be subject to the federal estate tax this year. The tax reform doubles the exemption amount from a base level of $5 million per person.

There were just about 1,890 taxable estates in 2018, according to the Tax Policy Center, compared to 4,687 taxable estates in 2013 with a base $5 million exemption. There were 52,000 taxable estates in 2000, when the exemption was $675,000.

An unlimited marital deduction lets you leave all or part of your assets to your surviving spouse free of federal estate tax. However, to use your late spouse’s unused exemption (known as “portability”), you must elect it on the estate tax return of the first spouse to die—even when no tax is due. The issue is, if you don’t know what portability is and how to elect it, you could be surprised with a huge federal estate tax bill. That should be part of your conversation with your estate planning attorney.

If you live in one of the 17 states or DC that impose separate estate and/or inheritance taxes, there’s even more at risk. Death taxes sometimes start with the first dollar of an estate.

While some states had plans to match the federal exemption amount for 2018, state legislators recognized that the new exemption was too high to be economically sustainable. Inflation-adjusted numbers have not yet been released for 2019 by most states.

Several states planned to match the federal exemption amount for 2018. However, state legislators thought that the new doubled exemption was just too high. Most states haven’t released their inflation-adjusted numbers yet for 2019.

12/13/2018

No one wants to believe that they could get hurt or become so sick that they could not work. However, the truth is, this happens to many people. Disability insurance is part of a healthy financial plan.

According to the Social Security Administration, as many as one in four adults will become disabled, at some point during their working life. Disability insurance is the insurance that pays a portion of your salary, while you are not able to work. However, the policy you own from work may not be enough to cover all of your costs.

When you're suffering from these issues and can’t work, disability insurance can help you bridge the pay funding gap. When going through open enrollment, some people’s patience also runs out after choosing their 401(k) solution, their health-care solution, or their health savings account and they forget about disability insurance.

You may also purposely avoid disability coverage, because of the cost. Disability insurance is frequently more expensive than term life insurance. However, think of it this way: the chances of missing six to nine months of work because of a car accident or other mishap are exponentially higher than dying prematurely, if you’re younger.

Long-term disability usually starts after three to six months and costs around 1-3% of a worker's annual salary. For most people who are covered through their employer, that policy typically replaces about 60% of their income. That may not be enough coverage, and you may consider purchasing another disability policy.

To see if you have enough disability coverage, look at your income, particularly the cash coming in and the cash going out. If you do become disabled, your costs could go up with additional child-care or medical expenses.

If you’re disabled, you don’t want to tap into your emergency or retirement savings. Look at how much you’re saving toward retirement, when estimating how much income you will need. You should also keep in mind the number of people who’ll be affected, if your cash flow takes a dive.

There are a few different ways to make sure you have enough income protection. You might be able purchase more coverage through your employer’s program. Some professional associations offer disability insurance at special group rates. There is the option of purchasing disability insurance on your own, which is known as “private” disability insurance. It is expensive, but having that protection in place, especially for high-income earners, could be more than worth the peace of mind.

12/12/2018

There is no end to the ways that people try to come up with ways to transfer their assets. The problem is, even if you technically can try this strategy, it may not work out the way you want.

Accounts that are titled as “transfer on death,” or TOD, means that the beneficiaries of the account receive the assets on the death of the owner. With the use of a TOD, you can also determine how much of each asset you want to go to each beneficiary. The named beneficiaries do not have any access or control of the account, as long as the account owner is living.

However, is a Transfer on Death (TOD) registration allowed for Certificates of Deposit and investment accounts? If so, what’s the process?

Sometimes confusion can arise about "sealing" or "freezing" the account.

Accounts that are probate assets—which are those in the decedent's name alone with no co-owner TOD designation—are “frozen” until the will is probated. The beneficiaries can’t access those funds until the probate judge signs off and allows the executor to move forward and disburse the funds. However, when the executor is appointed, he can open an estate account and access the frozen account.

That can happen within two weeks of death if the will is probated immediately. In that case, fund access for funeral expenses can happen right away. The executor will frequently pay the funeral home with a credit card and then get appointed executor and access funds, before he has to pay the credit card bill.

However, again in New Jersey, some of the account can be frozen for a longer period because of the state’s tax waiver system. Half of the account is frozen by law, until the state issues a tax waiver releasing its lien on accounts with New Jersey financial institutions and on New Jersey real estate.

The waiver is accomplished by filing a tax return and paying the tax (if any), or in some instances, a form of affidavit can be filled out and sent to the financial institution and the entire account will be immediately released to the executor.

The tax waiver system also applies to TOD accounts, but not to trust accounts. So making a CD a TOD account, doesn’t avoid the tax waiver system. Half of that account could still be frozen.

This is not as seamless a process as you may have hoped. A local estate planning attorney will be able to explain how this strategy may or may not work in your state, and explore what can be done to achieve your ultimate estate goals.

12/11/2018

Will a Joint Bank Account with My Child Solve a Problem or Create One?

It seems like a simple answer: putting a child’s name on bank accounts, so they can access money, if needed, in an emergency or in the case of incapacity. There are some pitfalls to this strategy.

Adding adult children’s names to a bank account is a fairly common practice among aging seniors. If something unexpected occurs, the thinking goes, this will allow the child to have access to pay bills and any emergency-associated costs.

However, making the child a joint owner of a bank account or other type of account can have unexpected consequences that may lead to more problems than it solves.

As Kiplinger’s recent article, “The Trouble with Joint Bank Accounts 'Just in Case'” explains, the vast majority of banks set up all of their joint accounts as “Joint with Rights of Survivorship” (JWROS). This type of account ownership typically says that upon the death of either of the owners, the assets will automatically transfer to the surviving owner. However, this can create a few unexpected issues.

If Mom’s intent was for the remaining assets not spent during the family crisis to be distributed by the terms of a will, that’s not happening. That’s because the assets automatically transfer to the surviving owner. It doesn’t matter what Mom’s will says.

Remember that adding anyone other than a spouse could create a federal gift tax issue, depending on the size of the account. Anyone make a gift of up to $15,000 a year tax-free to whoever they wish, but if the gift is more than $15,000 and the beneficiary isn’t the spouse, it could trigger the need to file a gift tax return.

For example, if a parent adds a child to their $500,000 savings account, and the child predeceases the parent, half of the account value could be includable in the child’s estate for state inheritance tax purposes, like in Pennsylvania. The assets would transfer back to the parent, and, depending on the deceased’s state of residence, state inheritance tax could be due on 50% of the account value. In Pennsylvania, the tax would be 4.5%, which would mean a state inheritance tax bill of more than $11,000.

However, if Mom’s intent in adding a joint owner to her account is to give her son access to her assets at her death, there’s a better way to do it. Most banks let you structure an account with a “Transfer on Death,” or TOD. With a TOD, if the beneficiary passes before the account owner, nothing happens. There’s no possibility of a state inheritance tax on 50% of the account value. When the account owner dies, the beneficiary has to supply a death certificate to the bank, and the assets will be transferred. These assets are transferred to a named beneficiary, so the time and expense of probating the will are also avoided, because named beneficiary designations supersede the will. This is the same for pensions, IRAs and life insurance policies.

Setting up an account as TOD doesn’t give the beneficiary access to the account, until the death of the account owner. Therefore, the change in titling isn’t considered a gift by the IRS, which eliminates the potential federal gift tax issue.

There’s no such thing as a joint retirement account because IRAs, 401(k)s, annuities, and the like can only have one owner—it’s not possible to make someone a joint owner. However, if a parent becomes incapacitated, they still often would like their child to have access to all their assets, in addition to their bank accounts. The answer for these is a financial power of attorney. This is a document that lets one or more people make financial decisions on your behalf. This document should be drafted by a qualified estate planning attorney.

It is important to understand that many financial institutions require a review process of a financial power of attorney appointment. The bank’s legal department may want to review the document before allowing the designated person to make transactions. This can take several weeks, so be sure that all financial institutions where you have accounts have a copy of your executed financial power of attorney. Have it in place before it’s needed.

Instead of adding the child’s name to the bank accounts and hoping nothing bad happens, sit down with your estate planning attorney. Explain what it is you want to accomplish, and he will be able to provide you with a few options.

You can transfer the car to an heir, by mentioning it specifically in your will, or just using the phrase “personal property.” If it’s a collectable car, however, there will need to be a specific reference.

Typically, the executor of the estate (if there’s a will) or the administrator (if there’s no will) would either:

Execute the bill of sale and the old title to sell the car to a third party; or

Execute the old title to transfer the car to the person who inherits it in the will.

The executor should have an original document provided by the probate court that shows the executor's authority to act on behalf of the estate. This is called Letters Testamentary. If there is an administrator, Letters of Administration will also be required and should be given to the new owner.

However, if the car is owned by both a husband and wife or by civil partners, the transfer can be made in New Jersey, for example, by sending a copy of the death certificate, the old title, and an affidavit supplied by the Motor Vehicle Commission confirming the status of ownership and the co-owner's death without the need for Letters Testamentary or Letters of Administration.

If the estate is small, under $50,000 in the case of the car passing to a spouse/civil partner or under $20,000 where the car passes to another heir, the documents required by the New Jersey Motor Vehicle Commission will include an Affidavit of the Spouse or Next of Kin, as filed with the probate court rather than Letters Testamentary or Letters of Administration, in addition to the old title.

To complete the transfer, the transferee will also need the odometer reading on the vehicle, the transferee's driver's license, her insurance information and payment of the fee charged by the Motor Vehicle Commission.

Because it’s so easy to transfer a motor vehicle, there’s no reason to put a vehicle in a trust prior to death. That’s only going to possibly increase insurance rates. Likewise, transferring the vehicle to a different owner prior to death, again could increase insurance rates.

However, there are several things that could cause a delay in the transfer of the vehicle's ownership. For instance, there could be a lien on the vehicle for an auto loan that would have to be paid before the car could be transferred. There also could be inheritance or estate taxes or other creditor claims that would need to be addressed, before a distribution can be made.

Other reasons your heirs could run into delays:

If the old title can’t be found, someone will have to obtain a duplicate title

Family members might fight about who should get the vehicle, unless that has been discussed and resolved in advance.

If your executor is having trouble performing their tasks, because of grief or other reasons.

Talk with your estate planning attorney about this particular asset, especially if it has a great deal of sentimental value to the family. If there’s an issue with the title, take care of that in advance. Talk with your family members about the car, to preclude any disputes.